Making sure that the plaintiff is not under-compensated or over compensated

As yesterday's post demonstrated, it is possible to create a situation where the plaintiff in a lawsuit involving lost wages could be under or over compensated simply because of the economist choice of interest rates. That is, if the economist selects an interest rate that is too high then the estimated damages would be too low. For example if the economist chose an interest rate of 3.0% nominal (including inflation) when even a 'safe investment' only pays 1.75%, then the lump sum suggested by the economist damage report would under compensate the plaintiff.

So how can you make sure that you get the damages right?

1. Use a economic expert to estimate the economic damages and present the damages to the jury

2. Use a annuitist (a person who sells annuities) to set up the actual annuity